Anglo Interim Report for 2010:H1

The report is here. The press statement is here. The loss for the first half of the year is reported at €8.2 billion. And “The Minister for Finance has recapitalised the Bank with a further €8.58bn effective 30 June 2010, bringing total capital support to €22.88bn.”

As the Apres Match version of the Minister might say, that’s a lot of noughts.

99 thoughts on “Anglo Interim Report for 2010:H1”

  1. [quote]
    In approving the €8.58bn capital contribution of 30 June 2010, the European Commission also allowed for €1.47bn of additional capital support. The Bank expects that this additional capital will be required in the near term and that further capital support may also be required, the level of which will primarily depend on the discounts applied by NAMA on the full transfer of eligible assets.
    [/quote]

    Will the EU approve further money for Anglo?

  2. Alan Dukes

    “I’m reluctant to say that will be the figure because to be perfectly frank, I think that anybody today who says that they can put a total figure on what the total losses are going to be is taking a pure punt. Nobody knows.”

    It’s a pretty remarkable policy to be the right policy no matter what its total cost.

    Also, it seems clear when DoF talks about “lowest cost to taxpayers” they mean “spreading an ever increasing cost over as many years as possible.”

  3. “The Bank’s impairment charge is calculated in accordance with IFRS and reflects losses incurred in the period based on conditions
    existing at 30 June 2010. Losses expected as a result of future events, no matter how likely, are not recognised under IFRS.”

    “At 30 June 2010
    €25.9bn of customer loans were expected to be sold to NAMA. The cumulative impairment provisions on these loans total €9.7bn or
    38%.”

  4. It is probably time to get Seanie and Co and lock them each in a cell, to be released after they have counted out loud to 22.88 billion…..

  5. Irish Times, 5 .12.08

    “THE 20 CONSULTANTS who were sent into the banks have now reported. Their conclusions about recapitalisation and the extent of bad debts are deemed to be confidential and commercially sensitive. Yet, in the official announcement, we are told very good news indeed. The consultants’ report apparently confirms that the capital position of each of the institutions reviewed is in excess of regulatory requirements as at September 30th, 2008. We are also assured that even in certain stress scenarios, the capital levels will remain within regulatory requirements in the period to 2011. We are not told how these exercises were done or even what assumptions were made about future land and property prices. On the face of it, however, the findings are positive, and completely contradict the negativity of speculators and various non-establishment commentators who never had access to the books of the banks.”

  6. @ Seafoid

    Indeed. Hopefully these consultants (PWC) will be called before the Banking Commission and asked to provide an explanation of this assessment. The role of the assessment in DoF decision making at the time would also be a topic that should be explored.

  7. @ al
    I’m not really sure why people blame seanie and co for this mess. Blaming bankers for being greedy is like blaming a dog for barking. It’s what they do, it’s what they are, no point pretending otherwise. The full blame lies with those who allowed them to indulge their greed to such a catastrophic extent and I solely mean the government when i say that, not the regulators. The level of regulation was pathetic, obviously, but watching our government ministers and our taoiseach point the finger of blame at the poor performance of our regultors is painful to watch. It would be a bit like Alex Ferguson picking a pensioner out of the crowd at old trafford, sticking him in as goalkeeper, then proceeding to blame the poor old sod after the game because his side were hammered 10 nil. Developers are greedy, they want money, bankers are greedy, they want money, regulators are only as good as the powers and manpower they are given….whereas governments are there first and foremost for the good of the people.

  8. Assuming the remaining NAMA bond loans have a discount of 55% and that the provisions on the rest of the book is OK (20% seems completely unsatisfactory IMO) we are looking at another €4.6bn in losses.

  9. “this option (splitting th ebank) retains
    the Bank’s existing €47bn funding franchise for the benefit of the State.” Anybody know what that means?

    What happens to the subbies on this splitting of the bank? Do they get onto the lifeboat or are they left with the sinking ship?

  10. I ask if the haircut applied by NAMA is too generous in the current climate. I don’t have a grand theory to stand this suspicion up nor reams of comparative data at my disposal. My suspicion is based on my personal knowledge of several developers and their businesses and my own experience. Let me offer just one instance. I am familiar with a property, a derelict house in a midlands commuter town, that was sold at the end of 2006 for €1.1m. Come the end of 2008, the property was repossessed by the lender. After two previous attempts fell through due to funding difficulties, it was finally sold in July for €180K – just over an 80% on the 2006 price. Make of it what you will but I believe NAM is paying too much and creating an artificial floor price for its ‘unsaleable’ assets.

  11. Arrgh…
    “After two previous attempts fell through due to funding difficulties, it was finally sold in July for €180K – just over an 80% discount on the 2006 price.”

  12. @ BW2

    Good question — and one that a journalist should put to Anglo’s management and chairman. Perhaps there won’t be a good bank. But if there is, it absolutely should not inherit current Anglo sub debt.

    Now this should be 100% clear — it would be morally wrong on so many levels to see Anglo sub debt get fully paid off out of taxpayer resources used to fund a new good bank.

    However, at this point, nothing would shock me.

  13. When an Economy (GNP) collapses from mid 2008 to now by around 15% do you not think that the secenario for loan losses also changes dramatically ?

  14. Anglo Irish Bank as a Liquidity Provider to the Irish State

    Reading the section on the restructuring plan on page 7, the chief benefit of the chosen plan seems to be that Anglo Irish remains as a provider of liquidity to the Irish state, via Anglo’s foreign deposit base and its access to ECB liquidity support. This is the opposite of standard theory where the state serves as a liquidity backstop for its banks. It sounds a bit third-world-banking-ish, where a bank is used to generate liquidity for the state.

    Is keeping Anglo open an arbitrage on the ECB or somehow fooling foreign depositors? If the Irish state is merely using Anglo Irish as a mechanism to arbitrage the ECB as a provider of liquidity, couldn’t the Irish state arrange with the ECB to do that through some other vehicle?

    I do not see the underlying source of economic value in this plan. I am open to suggestions, I just do not see it on first reading.

  15. How is all of this bank bailout shenanigan going to be paid for assuming the debt isn’t spirited away by a handy dose of inflation ? The taxpayer has limited means and the numbers being bandied about have no meaning for the average punter. Anglo I understand will cost a minimum €25bn which is just slightly less than twice annual income tax intake of ~€13bn. Surely the debate should be more specific- not just vaguely “borne by the taxpayer” but what the impact will be in terms of additional income tax and other taxes for Joe taxpayer for the next 10 years.

  16. Anglo is hiding behind IFRS 9 in not showing the likely future losses on NAMA tranches – that’s what you might conclude from reading the accounts.

    Below is what Anglo say on page 36 of the report – in brief they have chosen not to adopt changes that have been made to IFRS 9 which would require loans to be shown at fair value not amortised value. They are entitled to do this because the change to IFRS won’t be mandatory until 2013 but given the present circumstances and timing of Anglo’s results you’d have the question the motivation of Anglo’s management. Here is the link to IFRS 9

    http://www.iasplus.com/standard/ifrs09.htm

    Here’s what Anglo say in their report

    “A number of accounting developments which will apply in future years are described in the 2009 Annual Report and Accounts. The most significant is IFRS 9 – Financial Instruments: Classification and Measurement. Adoption of the standard is not mandatory until accounting periods beginning on or after 1 January 2013 and therefore the Group has not yet fully assessed the potential impact of this development. It is the first phase of a project to replace IAS 39 – Financial Instruments: Recognition and Measurement. Its aim is to reduce the complexity of accounting for financial assets and in so doing to aid investors’ and
    other users’ understanding of financial information. IFRS 9 uses a single approach to determine whether a financial asset is measured at amortised cost or fair value, replacing the many different rules in IAS 39. It also requires a single impairment method to be used which replaces the various methods currently prescribed in IAS 39.”

  17. Tick tock.

    Surely this charade is nearly over.

    Any mention of the interest clock on all of these non performing loans? Or the rolled up interest accrued to date? That bill is hardly decreasing either.

    Or the non recourse element of contained within the write offs? How about how much of the non performing loans were punted on the stock exchange rather than property “investment”, cross securitisation and all that wonderful jargon.

    Can we believe that NAMA are still politically independent, given that on all known evidience the transfers to it look light? Are these now being massaged as well to balance the interests of the government and the banks?

    At this stage we are in complete fuc)kin la la land (excuse the language) with regard to the whole structure of bank/Nama process etc.

    As Mr. Kiberd said in Sunday Times this week, this game is nearly up.

  18. “loss of €3.5 billion on the transfer of €10.1 billion of loans to the National Asset Management Agency (Nama).”

    How?

    If there was a discount of 55% on Anglo’s first tranche loans then does this not imply a loss of €5.5bn?

  19. @Rob S

    “Perhaps some account of the losses had already been taken in the previous results.”

    Spot on. You have to get your calculator out but there was €1.952bn of provision in the 2009 accounts in respect of the tranches up to June 30th (all of tranche 1 and €0.85bn of tranche 2). By the way the discount on the tranches to 30th June was 54%, not 55% (tranche 1 was 55% but this was slightly changed by the discount on the €0.85bn.

    I must say I found the information on the NAMA loans to be exceedingly convoluted to follow, though the upshot is that Anglo have a provision of 34% against tranches 3 onwards which given the experience of tranches 1 and 2 looks like fantasy – but again they can get away with it courtesy of IFRS 9 being optional until 2013.

  20. @KW

    My read is that this bad bank won’t actually be insolvent. It will merely be a bank in wind down and the government will probably guarantee all its liabilities. One way or the others I start to suspect that the subbies will escape and that does stick in the craw.

    @ Jagdip

    So at least now we have the explanation of AIB’s 18% provision against outstanding NAMA bound loans. It is IFRS nonsense. Purists insist that depositors should discriminate good banks from bad banks. But with the accounts seemingly being a complete fiction that is totally unreasonable. Didn’t Anglo’s 2008 H1 accounts present that corpse as a thriving athlete?

  21. I have to admire their creative thinking……

    How can they repo the Promissory note under the SMRA with the Central Bank and yet include the same promissory note in Core Tier 1 capital? I have no idea how that works.

  22. Does it really matter what Anglo reports, or how it reports it or what spin the DoF puts on it? Is not the end-game completely in the hands of the institutional EU? It’ll probably be into the new year before the shape of the end-game begins to emerge. Governments in the core EZ countries will be able to say to their voters: “Yes, Ireland and the Club Med players were really stupid, but they’re really suffering now. Making them suffer more now won’t do them any good and it won’t do us any good either. It’s time to cut them a bit of slack by easing the burden of bond debt in the Irish banks and the Club Med sovereigns.”

    It’ll take some courage for governments in the core EZ countries to confront thier voters with this message, but the bond market won’t let them sit on thier hands. Sooner or later they will have to bite this bullet; and, obviously, the sooner the better for Ireland and the Club Med.

  23. @ Paul Hunt

    I think there is a misunderstanding of the role of the EU.

    All the EU can do is block things that are illegal under EU law (especially regarding state aid). The EU has no power to block the government from blowing billions just to save face. The EU isn’t there to look out for us.

  24. Il Sole 24 Ore is reporting this afternoon on the Anglo losses in some detail. The paper quotes one of Anglo’s people explaining that the bank’s problems are not over because commercial property prices haven’t stabilized yet (a point I and others have made here several times). More significantly, the article claims that cds have jumped significantly (today I assume in response) for all Irish banks. I can’t verify the latter claim.

  25. @ seafoid

    “Surely the debate should be more specific- not just vaguely ‘borne by the taxpayer’ but what the impact will be in terms of additional income tax and other taxes for Joe taxpayer for the next 10 years.”

    Don’t forget the annual budget deficit of almost €20bn.

    This and the banking rescue cannot be viewed as mutually exclusive.

    @ Paul Hunt

    Trichet commented in Jackson Hole last Friday, in relation to reducing the debt overhang: “You will not be surprised to know that I exclude any kind of debt repudiation in the industrialized countries from these options.”

    So Von Rumpuy’s upcoming proposals are unlikely to include restructuring of debt.

    @ The Alchemist

    A lot of the Irish property investments in the UK were in office properties in the Greater London area. While value has increased 14% in the past year and will stall at best for a while because of the UK austerity programme, even a tepid recovery but sustained, will be positive for stock in this region.

  26. We operate to the highest ethical and governance standards as we aspire to be a model corporate citizen. For this reason we invest heavily in the development and training of our staff, as well as maintaining the highest levels of integrity in our relationships with our stakeholders. – – Anglo Irish Bank Annual Report 2007

    While the Institute of Chartered Accountants has appointed John Purcell, former Comptroller and Auditor General, to investigate the role of its members Drumm and FitzPatrick in concealing the directors’ loans, the organisation has remained silent on the dodgy paperwork/collateral supporting high value loans.

    It would be a routine function of an external audit to check a sample of the files for big contracts.

    No doubt some dodgy cases were found during the good old days.

    Shouldn’t the Attorney General have a role in this representing the public interest?

    Andrew Cuomo, where are you when we need you!!

  27. @Michael H,

    Thank you. I had noted that, but felt there was nothing else he could say at this stage. Perhaps Van Rumpuy’s Task Force won’t broach it either. But I remain convinced that, at some stage, some restructuring of debt will be required. And it is very clear that Ireland cannot pursue this course unilaterally – or without enormous support for sovereign funding. The market will continue to harry Ireland, Spain and Portugal until the institutional EU sets out a comprehensive end-game.

    Is M. Trichet’s growth option TOGIT while Ireland’s economy will continue to be bled white?

  28. Bondholders both senior and sub get paid premia for lending and risk/reward taking?
    The risks they took have proven to be disastrous – no reward – so THEY take the hit?
    Or do they?
    And if they don’t the taxpayer picks up the tab – competely and indefinitely? – in terms of much diminished services and higher taxes.
    Is that not like going into Paddy Powers,making a very substantial bet,bet fails but Paddy Power agree to pay you your stake because he needs your custom in the future?Some deal!

  29. Alan Dukes blandly repeated this morning that he and the management team at Anglo assumed that the first tranche would be transferred to NAMA at 28% which was some “consensus” figure being discussed at the time yet the discount was actually 55%.

    A remarkably complacent statement for the chairman of a bank to make.
    Did they not have 100% access to all the loan details.
    They were after all only a few big developers involved in the first tranche.
    Were they not even mildly intellectually curious enough to run a few estimates themselves?

    Strangely enough the scales only fell from his eyes on the day before the transfer when NAMA informed them that it would be 55%.

    And we trust these people to run a bank and to make proposals to government about its future.

  30. An article in today’s Belfast telegrah suggests that the Brits sell us ‘Ulster’!
    Our troubles are over in the banking area at least!
    Net running costs of ‘Ulster’ per annum – about 12bn € – say a rice 5 times the net = 60 bn€ – and we get superb infrastructure – hospitals/schools/motorays etc.,
    Yahoo!!
    And we can keep pushing costs/deficits down the road!!!

  31. The original reason given to the small people and the turkeys voting for a FF christmas was that saving Anglo would 1.Relase credit to companies and 2. Allow Irelands Financial reputation to be kept intact becasuse saving a bank was sacrosant and systemic so Ireland could continue to loan cash on international markets. The real reason was so that the landowners could get their deposits out of Anglo.

    As for number 1 Credit markets are in paralysis and for number 2 we are now told by Moddys and the financial Times that we have lost our international fincial reputation and credit rating BECAUSE we backed Anglo. The proscription has killed the patient. The Doctor and his cronies are still there preaching how they are going to send benefit holders out to work.

    We have probably 20 bn of a credit line left before the shutters come down for good on this godforsaken land. Are we going to blow this on building motorways to nowhere, a metro for the odd deranged tourist and another 10 bn to NAMA and Anglo or should we give it the IDA and Enterprise Ireland, the only institutions that give us any hope for the future. Civil service salaries are too high and there are too many of them. Consulants get paid more than anywhere other than Norway. Unlike Norway they are not expected to pay any tax on their earnings and we dont have any oil. Get reaL FAST PLEASE

  32. They are walking themselves into a PR disaster. First the Greens ask for a quick wind down and a FF backbencher backs them. Next Dukes says 80% will we set apart and wound down. An expectation is building up that we are reaching a denouement but unless they actually have in mind torching subbies and/or seniors no amount of restructuring is going to stop the heamhoraging.

  33. @BWII

    Are we down to down to two options: (1) the good bank/bad bank split (further (unrevealed) details of which the MoF announced were sent to the Commission today) with a long drawn-out wind-down of the latter or (2) EC/ECB/IMF Greek-style administration which provides the sovereign funding support to enforce selective debt write-downs?

    The Commission will be unlikely to sign-off on an Anglo restructuring until it has an enforceable limit on the state capital transfers. This may be enough to appease the bond market. But it could keep going, as it did with Greece, until it forces Ireland into Option (2) above.

    The net discounted full cost of this option could be much lower than that of Option (1); the difference is the value placed on retaining a measure of sovereignty.

  34. @ BW2

    the Greens want a quick wind down, but that is for the 2-3% of the electorate who support them. All FF backbenchers like Fleming want to do is go around saying that the put a line through Anglo. They do not want to defend it on the doors. Fleming means a quick windown as in 10 years or so…not that quick. I suspect Lenihan is preparing for a negative EU decision and a retreat to the wind down position.

    @ Gavin S

    The promissory note shimmy underscores that Anglo is not a normal bank. The govt has not borrowed the money to put into Anglo, it has promised to borrow the money at some future date. This IOU is Anglo’s capital.

    This IOU is the collatoral behind some of the borrowing from the ECB. If the state was to go out and borrow this amount of cash at the momemt, most of it would end up on the books of the ECB. Surely this is quantitative easing.

  35. If Peter Mathews is checking in –

    For the first time, Anglo has shown the non-NAMA loans to a fine level of detail on page 66 of the interim report broken down by territory and type of loan. It also breaks down the provisions in the same way. We can see for example that commercial property has a 14% provision which given that over half of the first two Anglo NAMA tranches was “associated loans” of investment property and the two tranches attracted a 58% average haircut would seem to suggest that if similar discounts were applied to the non-NAMA property loans then you very quickly get well beyond a €30bn *net* bailout.

    It wouldn’t take much to do the calculations but if they had the imprimatur of a property/banking specialist then that might provoke a constructive exchange so that Patrick Honohan can defend/justify his €22-25bn *net*.

    If it helps I have converted the note on page 66 to a spreadsheet and calculated the % provisions as well here.

    https://spreadsheets.google.com/ccc?key=0AlV6jFjykyK6dHlwSkhNQWRSMTd6WjhkbF9JZFBJSWc&hl=en&authkey=CJDZ5-0B

  36. .
    I notice that ‘rent-a-crowd Dukes’ says that most of the loss is due to NAMA behavior.

    I guess that puts ‘Seanie’ in the clear.

  37. Its obvious that they know something that we don’t. They have failed to reveal the figures and 2 years later we still don’t know the true extent of the problem. This is an unreal situation. What is forcing the Dept of Finance to keep pumping billions into a black hole when its clear that there are options? The Bondholders have to take a hit. Ireland has to show that it has the taxpayers interests at heart. 50% Default on all Anglo Senior Debt at a minimum and wipe out the sub ordinated debt. Partial Default of sorts on Anglo Debt only. In tandem, a a structured plan to make serious investment into the economy to attempt a kick start.

  38. @BW2
    Agree 100% on the PR element. Nobody seems to be in political charge. But, my antennae, such as they are, are saying that the GP will not walk under any anglo circumstances – they will swallow whatever loss. That could be wrong but its consistent across parties
    How much senior debt is left, how much subbies – it doesnt really matter as a sacrifice of the bond gods is needed now one feels.

  39. @BL

    In answer to you question-less than 2bn subbies, 14bn senior less 10 guaranteed less 2bn covered leaves 2bn senior unsecured. Other numbers put senior unsecured at up to 4bn if less than 1 year stuff is included. So there is up 2bn subbies that may be burnt and 2-4bn more that others want to burn., unless one is a real zealot who wants to default on Govt paper.

    What does “sacrifice of the bond gods is needed now one feels” mean?

  40. Back in 2008 the Irish Times estimated the banks had a total property loan book of E110bn. What is the latest figure on that and how much of it is now written off/to be written off ?

    I was reading a few articles from 2009 on the subject and one of the TDs said sure debt is only at 40% of GDP and we still have the AAA rating. It is like a game of strip poker played on the advice of nameless but infallible consultants, gone wrong and Ireland is now down to one garment.

  41. Tull.
    Thanks ; got to see the actual accounts now at home.
    – im correct in then saying that the 14b you refer to is the Medium term notes yes? of which some 7 is for rollover in September.
    The quoted piece is a backref to Krugman;
    If we all agree, and nobodys disputing it bar Anglo, that there are several (4-10) billions of losses to come then we need to think – at this juncture should the taxpayer continue to bear all the pain? And would some degree of burdensharing not be a good idea, politically? I say now we work to withdraw, if we can, the guarantee from the dated subordinated debt as a minimum.

  42. I just got a cheque today from Postbank as my account has finally closed. A no frills bank that was set up to service the disadvantaged. It never did any reckless lending, or lost money. It has closed because there was no longer any will to keep it open.

    On the other hand, we have the sick lengths to which the State will go to pump money into a failed bank, which serves only an elite few. They have brought the State to the brink of bankruptcy to save this bank to the wealthy, while not a finger could be raised to preserve the bank for the little man.

  43. 14bn is the MTN stuff -the 7bn maturing in Sept is Guaranteed plus there is another 2.9bn (?) under other ELG scheme. I would hope the subbies get burned. I think most people would agree.

    As regards the 1.5-4.5 bn senior unsecured non guaranteed stuff-well everybody knows the pros and cons of that argumaent at this stage & most have taken sides. Any change there will be taken above the pay grade of most on this thread.

  44. May I remind you gentlemen that it was a long time ago that Brian Lucey said Anglo would cost us 35bn.

    Any change or update on that Brian?

    What a charade this is.

    Where is JtO? Surely he can put an optimistic slant on this?

  45. @Paul Hunt and Jules

    “Restructuring required” is something of an understatement. I think you are calling for some form of default, ie. sovereign default. I agree that we need to pull the rug on the whole sorry mess. But crucially as a first step we need to get our hands on GOLD.

    Gold and Silver – traditional stores of value for at least five thousand years – will regain primacy as currency in our societies going forward.

    How does Ireland get it its hand on an amount of gold bullion (delivered) equivalent to approximately one quarter of M2? We would have to steal it or plead to someone like the Russians to take us under their wing as a client state. (Or convert to Islam perhaps?)

    We need to borrow and buy physical gold. Take delivery and wait till the currency in which our debts are denominated is extinguished. All our favours will have to be called in on this one. The US cannot help us. The UK will not help us. We will need to go to producer countries and pay over the odds or buy from the Arabs – again over the odds.

    This is how we survive. Otherwise it is back to the forties. The eighteen forties.

    All our debate over the good bank/bad bank issue will prove to be fatuous as events quickly overtake us. All fiat currencies are doomed. Joern Berringer, says “three weeks before a major currency event” which will start the avalanche. He could be wrong it might be three months but the only thing holding up the whole rotten carcass now is hot air. In the meantime our “Brains Trust” worries over tier one or subordinated debt!

    So when the second leg of this debacle touches down and we end up in the maelstrom which will be the end of US hegemony and the end of the dollar, we will be sitting there asking ourselves why? Why did we bail out those banks?

  46. I’m know I’ picking an old scab here, but the Master Loan Repurchase agreements seem to have morphed into something called a Special Master Repurchase Agreement.

    Bit like a three card trick, this one, but worth going through.

    The MLRA first appeared in the Mar ’09 Anglo books and was described as “€10.0 billion (30 September 2008: €nil; 31 March 2008: €nil) borrowed under a Master Loan Repurchase Agreement (‘MLRA’) with the Central Bank and Financial Services Authority of Ireland.”
    From note 17 in that report we see that:
    “Loans of €14,868m (30 September 2008: €nil; 31 March 2008: €nil) which have been assigned as collateral under a Master Loan Repurchase Agreement with the Central Bank and Financial Services Authority of Ireland”.

    So, in its first incarnation MLRA was €14,868bn collateralised for €10bn of our money. Which is odd, but fair enough, considering the position of the bank at that date.

    But, in the end of year accounts for 2009 the MRLA is still there, and unbelievably, it has gotten much much worse: “€11.5bn (30 September 2008: €nil) borrowed under a Master Loan Repurchase Agreement (‘MLRA’) with the Central Bank and Financial Services Authority of Ireland.”
    Which had as collateral:
    “Loans with a carrying value of €12,490m (30 September 2008: €nil) which have been assigned as collateral under a Master Loan Repurchase Agreement with the Central Bank and Financial Services Authority of Ireland”

    That is a write down of only 7.67%. I wonder what assets Anglo had that could merit such a small writedown? Afterall, Anglo had shipped off its better loans for its UK division bonds and presumably used the rest of the good stuff for the ECB. So where did it find these AAA assets for our Central Bank?

    A little clarity today (perhaps, this stuff is more than a little opaque)

    MLRAs still exist in today’s report, but have been joined (and overtaken) by SMRAs.

    Seems to work like this:

    The numbers are similiar to the dec ’09 numbers with:
    “€11.6bn (31 December 2009: €11.5bn) borrowed under a Special Master Repurchase Agreement (‘SMRA’) and a Master Loan Repurchase Agreement (‘MLRA’) from the Central Bank and Financial Services Authority of Ireland.”

    But with the added:
    “The majority of the funds were advanced under the SMRA, involving the sale and repurchase of the promissory note.”

    The MLRA consisted of:
    “loans with a carrying value of €2,754m (31 December 2009:€12,490m) have been assigned as collateral under a Master Loan Repurchase Agreement with the Central Bank and Financial Services Authority of Ireland”
    There is no breakdown of the special facilities to show how much the CB is giving for these assets.
    The Special Master Repurchase Agreement is backed by the promissory notes as mentioned above.

    All that make sense?

    So, (please correct if you think I’m way off here), it would seem to me that the collateral that the CB had been previously advancing the MLRAs agreements on has moved to NAMA, and been replaced by the promissory notes. Of course, the scandalous part of that is that the CB had been discounting assets by 7% that were eventually discounted by NAMA by 55%+. I say this because it would seem unlikely to me that Anglo would change the structure of the MLRA unless it had to – ie by the collateral being moved to NAMA; because the MLRA as it was set up was such a sweet deal for Anglo.

    So, (again opaque stuff), €10bn of the collateral is moved to NAMA, Anglo only get €4.5bn for it, leaving a hole of €5.5bn. A hole that is filled by the banks shareholder (you know who you are!). Anglo gets a shiny promissory note that is can use as collateral through the CB to access liquidity.

    So, if I’m right about all this, our CB spend well over a year propping up this ‘bank’ by paying near par value on assets that it must have know were worth significantly less that that.

    And now our CB is providing liquidity to this ‘bank’ via another (probably worthless) €2,754m of assets and a promise from the taxpayer written by Mr. Lenihan.

    Is the behaviour of our CB even legal under EU rules?

    Either way, there will be plenty more of this stuff to come, because, as Anglo themselves say:

    “As the Bank’s reserves of unencumbered liquid assets which it can pledge as collateral are limited, and depending on the timing of the transfer of future tranches to NAMA (and corresponding receipt of NAMA bonds), refinancing may require increased access to special funding facilities with monetary authorities. Should monetary authorities materially change their eligibility criteria or limit the Bank’s access to such special funding facilities this would adversely affect the Group’s financial condition and prospects.”

  47. Lorcan
    This reminds me of the climactic scene in the great Danny Kaye comedy “the Court Jester”, involving poison
    “Hawkins: I’ve got it! I’ve got it! The pellet with the poison’s in the vessel with the pestle; the chalice from the palace has the brew that is true! Right?
    Griselda: Right. But there’s been a change: they broke the chalice from the palace!
    Hawkins: They *broke* the chalice from the palace?
    Griselda: And replaced it with a flagon.
    Hawkins: A flagon…?
    Griselda: With the figure of a dragon.
    Hawkins: Flagon with a dragon.
    Griselda: Right.
    Hawkins: But did you put the pellet with the poison in the vessel with the pestle?
    Griselda: No! The pellet with the poison’s in the flagon with the dragon! The vessel with the pestle has the brew that is true!
    Hawkins: The pellet with the poison’s in the flagon with the dragon; the vessel with the pestle has the brew that is true.
    Griselda: Just remember that. ”

    As the meerkats say, simples, yes?

  48. @LorcanRK — Would there be any chance of boiling that down to Anglo-Saxon words of one syllable so that us Plain People of Ireland could spread it around? I’d just be afraid of getting something wrong in the translation.

  49. @punter

    heading down under, not getting a job here so all the tax can go on bailing out Anglo when I don’t agree it should have been bailed out in the first place. Maybe that is greedy and selfish but the wrong people have been left to pick up the tab for this mess!!!

  50. @Bock
    The IOU that the government wrote for Anglo (the Promissory note) has been cashed in at the Irish Central Bank. Despite the government telling us the note would take years to pay out in full, it is being used to generate cash already. If Anglo goes bust, the Irish Central Bank will make a loss unless they get their money back immediately from the promissory note (to the full value).

    The government could just refuse, I suppose and the Central Bank would take the loss. But hey! Guess who’s responsible for the losses of the Irish Central Bank? That’s right… step right up Mr. Taxpayer, now just bend over… a little to the left… perfect. This won’t hurt me a bit.

  51. @Bock,

    Anglo went to the CB in Mar 09 with a Pig, It was in a Poke.

    Anglo said the Pig, which it had bought for €14bn was worth €10bn.

    The CB (being a friendly sort and knowing Anglo needed a dig-out) didn’t look in the poke and gave Anglo the money, making sure Anglo promised to give it back.

    By Christmas, things had got no better for Anglo, so it went back to the CB with a different Pig, also in a poke.

    Anglo said it paid €12.5bn for the pig, but it was worth €11.5bn – because the market for pigs in pokes was booming.

    It being christmas, the CB couldn’t say no and paid up (again, without looking in the poke)

    Unfortunately for all, Mr Nama came along and looked in the poke. “Wow,” says he, “That pig is only worth 45% of what Anglo paid for it”

    The CB could be in a bind now, but Anglo goes to his daddy ( a pig breeder, Mr. Lenihan) And gets some shiny new pigs, that don’t live in pokes.

    Anglo goes back to CB and says, “Here, my daddy gave me these, they are worth a fortune; could you take them, and this other pig I have in this poke for €11.6bn?”

    CB, being that sort that doesn’t learn quickly says fine, and pays up.

    Anglo says thanks, and promises to be back soon with many more pigs (Some poked, some not) in the near future.

  52. @Bock,

    I should add that Anglo didn’t go to the ECB (a really big pig buyer) with the pig in the poke, because Anglo knew that the ECB always looks into pokes.

    It kept its good pigs for the ECB, and its very best pigs, it sent off to UK to sell through its cousin (Anglo UK) to the pig market there.

  53. @Paul H
    Yes – time for a default and restructuring backed by IMF support. That requires vision and tough leadership. But who is going to argue our case for the obvious? The EU will oppose it because they know they are better off if we suffer to repay them. The government surely won’t. Patrick clearly has sold out now. So no one. Our so-called leaders are shirking public duty for their own egos and they are too afraid to admit they made errors in analysis when they started us down this bailout path. That means we probably just march quietly into a good financial calamity that forces whoever is leadership at the time into action. Ugh.

  54. @ seafoid

    The latest sectoral data for private credit is for Mar 2010.

    Commercial property/construction was €93.6bn and residential house finance was €110bn down from €146bn in mid-2008.

    Property related lending was 55% of the total compared with 63% in mid 2008.

    Total private sector lending was 2.6 times GNP in March compared with 2.7 times in mid-2008.

    @ Paul Hunt

    Paul,

    Restructuring of debt will only happen as part of some tough regime.

    If it became convenient for a big economy like Italy’s to restructure, the Germans and French would not agree to it.

  55. This whole escapade reminds me that old hans cristen tale “The Emperor’s new clothes” with clowen starring as the emperor. Finally the rating agencies have exposed the governments banking strategy and the clock is now ticking for ireland inc. How deluded was this government to think that a country of this size could credibly underwrite the liabilities of an entire banking system. They are either completely incompetent or have just perpetrated the largest fraud in the history of the state on behalf of their crony pals.

  56. @BL – “All joking apart, its stunning that this hasnt gotten more air/print time”

    They still let you write for the Irish Times don’t they?

    Do your country (its taxpayers anyway) a service!!

  57. It is ingenious that you can borrow cash from the Irish CB for something that does not actually exist yet. From the POV of the CB, they have replaced IOUs from Bob the Builder, secured on overvalued dirt with IOUs from Brian the Taoiseach, secured on taxation. That is good for the CB.

  58. “Mr Aynsley said the bank had now marked down the value of its non-Nama loans by 54pc. “That should be reasonable, unless we see another significant downturn,” he said last night”

    Anglo’s non-NAMA loans are detailed in note 35 on page 66 of the report and they show a *cumulative provision* of 17% – NOT 54%. Anyone see how this report could possibly make sense?

    from Laura Noonan in the Independent

    http://www.independent.ie/national-news/anglo-facing-horrendous-euro14bn-losses-2319453.html

  59. @Michael H,

    Thanks for the heads-up on the IMF papers. I agree with your observation about Italy, but the core EZ (broadly equivalent to the original six members) have a long history of making some allowances for each other – even if occasionally there’s been blood on the carpet. To a considerable extent Italy and Belgium have always been indulged. The fact that Italy could split into two pieces and Belgium into three may be a factor.

    Politicians in the core countries have long years of experience of convincing their voters that there are benefits to pulling together that outweigh the costs. They either have not tried or or are unwilling to make that case in relation to Ireland and Club Med. Germany is becoming more assertive and less willing to do the heavy-lifting it did previously; and if it has to do some it would prefer to do it to its east.

    From the perspective of voters in the core the Greeks lied, the Irish went totally mad and the Portuguese and Spanish also lost the plot – and they did so using the savings of ordinary voters. We probably don’t need to go back to Adam Smith’s ‘Theory of Moral Sentiments’ to understand what’s going on.

    There is clearly a willingness at the EU institutional level to achieve some cohesiveness and solidarityand to bring the errant periphery back into the fold, but they fear the reaction of voters in the core countries. It’s the Prodigal Son and the reaction of the brother who remained to do his duty.

    And the Government here seems to be determined to make Irish citizens pay dearly to maintain some semblance of sovereignty.

  60. @ Jagdip Singh 31st August 7:03pm

    Your spreadsheet, presenting the constituent elements of Anglo Loans not going in to NAMA and their related provisions (derived from Anglo’s Interim Report page 66) and also your provisions’ %’s calculations thereon was most instructive.

    Based on past, recent and present experience and having conferred with experienced professional associates and considered their views, in my judgement, the provisions totalling €6,233 are much too low.

    After careful consideration and adjustment of the %’s on your spread sheet in order to refelect truly recoverable loan amounts, the total provisions should, in my opinion, be increased to a total of €16,323, implying further write-downs totalling €10,090. Revised total provisions of €16,323 represents 43% of the €37,749 Gross loans not going to NAMA.

    Yesterday and also during the last week everyone’s attention has focussed on Anglo and the horrifying scale of its losses.

    Even more importantly, for the sake of the recovery of our economy and to ensure that we have a properly functioning Banking Sector, we must immediately re-address and correctly re-assess the pressing re-capitalisations of AIB, Bank of Ireland and EBS.

    Again, on careful review and consideration of updated relevant loans portfolios, financial, economic and market information, in my judgement, AIB needs at least €10bn (not the “stale” €7.4bn before this year-end estimate announced in March 2010 which was based on information coming from no later than Jan/ Feb) , Bank of Ireland needs €6.5bn (not the €3.65bn “stale” estimate also announced in March by Minister Lenihan) and EBS needs €1bn.

    The imminent necessity of extending the State guarantee on Banks’ Liabilities and the urgency of the government’s unavoidable duty to re-acknowledge the true re-capitalisation needs of the 3 viable banks presents them with the opportunity to show true leadership by investing in the banks at a level of €11bn thereby temporarily nationalising them (nothing wrong with that – look at the operational improvements achieved at RBS under 84% State ownership and the effective leadership of Stephen Hester) and “forcing” bondholders in those banks to participate in that re-capitalisation at a level of €6.5bn debt forgiveness (bonds write-downs) which might perhaps include a very minimal (optical gesture token) debt for equity swap.

    As part of the Banking Sector improved rescue “re-boot”, Anglo and INBS would be declared “closed” and wound down over an orderly period of years, with bondholders, subordinated and senior, being exposed to the distribution shortfalls (losses) ahead of depositors.

    Why should depositors receive this consideration? Because depositors never invested in the Anglo or INBS operations as such …. they placed their deposits at Anglo and INBS because those institutions were, quote from all the advertising, “licensed by the Central Bank and were regulated by the Financial Regulator” precisely as it said on the tin, on the shelf, in the shops!. Depositors are mostly not sophisticated investors. Mostly they are not resourced with professional accountants, stockbrokers, analysts, lawyers, actuaries, valuer surveyors etc to carry out financial and operational analysis and assessment on bank balance sheets and reports.

    By contrast, bond investors and bondholders, are generally resourced with those skilled and savvy professionals to carry out analyses and due diligence. These bond investors / bond holders in Anglo and INBS, were investors in the Anglo and INBS operations and were generally investors / bondholders for longer periods than depositors. In the case of Anglo they would have regarded themselves as skilled and savvy professional bond holding investors in the Anglo “model”. They would have been particulalry aware (and perhaps proud) that Anglo had been celebrated, nominated and congratulated, at the Davos conference in Switzerland only about 3 years ago, as having the best banking model in the world! That was the specific accolade given to Anglo at the Davos annual get together of the rich, the powerful (world politicians) and the clever (nobel prize winning economists and leaders of powerful and influential world and european institutions). Besides, the bondholders in banks would have regarded themselves as full members of the powerful financial investment community, on an insiders’ power and and influence par with the large institutional shareholders in the banks and the members of bank boards.

    It’s quite obvious that to “re-boot” our Banking Sector we need true and honest assessment, fresh thinking, clear thinking, intelligent planning and decisive action. Above all we need fresh faces! Urgently!

  61. @Jagdip

    I think the 54% relates to their Loan Loss Reserve as a % of impaired loans in their Non-NAMA loan book. They have taken a €7.5bn impairment charge on a €13.9bn of impaired loans in the Non-Nama book. (see page 12 of the report)
    It’s a decent coverage ratio by international standards but I suppose Anglo is not your typical bank.

  62. Meanwile back at the ranch, from RTE today:

    “the Greens want to see real progress on the banning of corporate donations to political parties by the end of the year”

    Obviously have awoken from their slumber from under that tree. It’s the big issues that really matter.

    Here’s one for all of you. What if Allied Irish Bank requires twice or three times the level of recap than the €7bn figure mentioned? Go back a year and Sean Quinn was the elephant in the room. Now it’s Anglo stomping around the room creating havoc, but hold on who is the baby elephant sitting quietly in the corner. Plausible…..?

  63. @Peter

    I would like to see a detailed breakdown of your figures.
    I don’t know how you can reasonable say that Anglo need another €10 billion provisions on their Non-Nama loan book. For that to bear fruit, you are talking about 0% value on impaired assets and over a 50% impairment charge on performing assets.

    Anglo’s biggest risks are NAMA haircuts and exposure to big customers like Sean Quinn. Looking at the report, I can’t rule out the cost climbing to over €30 billion but going by the figures presented and barring another economic disaster I think the Minister is nearer to being right than S&P. (Although I didn’t like the way he attacked S&P yesterday)

  64. @Peter Matthews

    Why should depositors receive this consideration? Because depositors never invested in the Anglo or INBS operations as such …. they placed their deposits at Anglo and INBS because those institutions were, quote from all the advertising, “licensed by the Central Bank and were regulated by the Financial Regulator” precisely as it said on the tin, on the shelf, in the shops!. Depositors are mostly not sophisticated investors. Mostly they are not resourced with professional accountants, stockbrokers, analysts, lawyers, actuaries, valuer surveyors etc to carry out financial and operational analysis and assessment on bank balance sheets and reports.

    And what about the ‘high street’ investor who makes decisions based on published accounts and reports, and perhaps a bit of nosing about? Why has the government ignored the losses incurred by ‘ordinary’ shareholders’ as by consent the facts laid before the public by Anglo over several years were not a fair account of the true state of affairs.

    There was a concerted campaign involving private individuals and state actors to present a rosy picture of Anglo for months prior to its collapse. Many will recall the condemnations directed at ‘whisperings’ about Anglo’s health. The facts are that the Financial Regulator and the Central Bank stood over Anglo and reassured the public that Anglo was in rude health, while at the same time the same institutions had information indicating otherwise.

    Bondholders in any category will not be ‘burnt’. The fixed income from the preference shares paid pensions etc. The government won’t and can’t upset ECB sensibilities. However, the shareholder who managed his/her own pension is getting no such consideration. I really am looking forward to the next election.

  65. @Jagdip (just reading from your blog)

    So although it says in the results that there are only provisions for 34.3% for the discount on future Nama tranches, we had MA saying in the press conference that no extra money would be needed (above and beyond the €25bn) as long as the discounts on future tranches don’t exceed 65%.

    So as the provision in the results nothing to do with them really feeling they’ll need anything above €25bn – just that they would rather worry about the remaining procisions (65% – 34.3% = 30.7%) in their next set of results?

    Did any of that make sense? Basically, it seems from the conference they have included a haircut of 65% in the futue tranches and still feel the cost won’t go above €25bn.

  66. “The clean-up bill for Anglo Irish Bank [ANGIB.UL] may top an estimate of 25 billion euros ($32 billion), a minister said on Wednesday, as the value of its debt still to be moved into Ireland’s ‘bad bank’ remains unclear.”
    Martin Manseragh, quoted on Reuters

  67. Just as bad coin drives out good, bad banks will be all that is left!

    We have only had half of the surprizes we are going to get, out of Anglo.

    How much is committed to derivative positions?

    What is still being hidden? Are they maintaining the bet, by holding on? This is still a pig in a poke. It isn’t squealing any more. What will these columns be saying in five years time?

  68. @Rob S

    When discussing Anglo we need distinguish between three terms

    (1) Losses on the NAMA and non-NAMA loans
    (2) Net bailout costs (different to 1 because of existing capital, pre-existing loss provisions, possibly not honouring bondholders in full, etc etc etc)
    (3) Gross bailout costs (some of which will be recouped over time)

    From my very rough calculations a 58% average NAMA haircut would now mean Anglo would have a net bailout cost of just below €25bn. If non-NAMA loans have a similar risk profile to NAMA loans (see Peter Mathews above) then the net bailout rises to the mid-30s according to my back of the envelope calculations. The gross bailout would be about €5bn more on top for Anglo Newbank seed capital and short-term funding which would be recouped over time.

    In summary at this stage it comes down to your views on the non-NAMA loans. And remembering in March Anglo 2020 thought a 28% haircut was adequate for the NAMA stuff which now turns out to be double that, I am deeply suspicious that the non-NAMA losses will rise.

  69. Sure, but just focusing on the Nama losses for now.

    Are you confident that a discount of 60-65% in future tranches has now actually been included in Anglo’s calculations for a final bailout figure of €25bn?

    You didn’t yesterday (nor did I to be perfectly honest but then I saw the press conference).

  70. @Rob S

    There is a difference between the NAMA (and non-NAMA) loan losses and the net bailout. What I think I said was that Anglo should be recognising another €4.64bn of losses on NAMA loans on top of the losses reported yesterday. But remember that Anglo has capital of €6.5bn (page 26 of the interim report).

    Or to put it another way, Anglo has some capital of its own to absorb some of the losses. So if losses increase it can absorb them without seeking an additional handout.

  71. Ah I see.

    I failed to take the use of existing Anglo capital into consideration.

    Yes the article with the €4.64bn was the one I was referencing alright.

    Danke.

  72. Jagdip
    I think we can take it as pretty likely that the non-NAMA loans are deeply impaired. They may not be 60% impaired but they are deeply impaired.

  73. @BL

    When you consider that Anglo themselves were only prepared to recognise 28% losses on NAMA loans in March just before the first tranche transferred at 55%, you’d have to at least consider that the non-NAMA loans that have not been subject to the rigour of third party valuations (NAMA and the EU) are at risk of losses well above what Anglo say. Peter Mathews above gives his analysis.

    Other than excluding land and development loans (which made up less than 30% of tranches 1 and 2 incidentally – almost 75% of these two tranches was other property) why should the non-NAMA loans be less impaired than the NAMA loans?

    Same lending officers and lending practices. Same assets (aside from the small element of land and development). Same type of borrowers. Yet the non-NAMA stuff is provisioned at 17% and the average experience of tranches 1 and 2 is 58%?

  74. Can I double check something on the coporate deposits. The ones which of less than three months are no longer covered post-September.

    Does that mean the deposits have to have been with the bank for three months to be covered OR is it that they have to be deposits which are tied to the bank for a period of more than 3 months (aren’t accessible for three months or greater).

  75. From the information that Anglo has provided I tried to do a bottom up approach to calculating the future possible losses on the non-NAMA loans in particular.

    Existing NAMA loans & provisions
    http://img695.imageshack.us/img695/3121/angloprovisionsonnamalo.png

    The provisions for losses on the NAMA loans are still on the light side at 38%, given the last 2 tranches have transferred at 55% and 62%. However, through the NAMA process I think these estimate should be more accurate than the non-NAMA loans as more analysis has been forced on the banks for these loans.

    I have applied the NAMA % provisions for each loan type and location to the non-NAMA loans to calculate a more accurate provision for these loans.
    This results in a non-NAMA provision of 29.1% and a further loss of just under €3.4bn

    http://img405.imageshack.us/img405/5909/adjustednonnamaloans.png

    However, as we know Anglo is under providing for the loans going into NAMA. By using the actual discounts on Tranche 1 & 2 as a more accurate estimate of the true value. The provisions on the NAMA loans would need to be increased to say 55% (lower of two tranches) from the current 38%

    This adjustment increases the provision on the NAMA loans to 55% and generates an additional loss of €4.6bn The adjustment increases the discount on the non-NAMA loans to 42% and generates an additional loss of €9.7bn from current provisions.

    The future losses under these assumptions is €14.3bn and brings the total Anglo losses to €37.2bn. Against this you need to offset the “excess” capital Anglo is currently holding on its balance sheet. It currently has €7bn in capital and assuming it needs to at least €3bn (€82bn – €20bn ) X 5% then there is €4bn to spare.
    That brings the total state funding to €33.2bn.
    Not to far off the €35bn than S&P and many others have been projecting.

    http://img825.imageshack.us/img825/8665/nonnamawithtrancheadjus.png

  76. @ Jagdip

    Your point is very well made. Anglo’s report says it very clearly that IFRS provisions are much lower than what they would know almost for certain to be the correct write down. It was I think referring only to the NAMA bound stuff but surely the same IFRS unreality applies to non-NAMA loans.

  77. @DE

    That’s impressive work! For those who will say that NAMA loans should be prone to higher losses because they’re primarily for land and development and as an asset class L&D fell most, I would say the following:

    (1) You’re right – according to Savills development land is off 75-90% compared to say commercial 60% or residential 35%.
    (2) Land and development makes up a small part of NAMA tranche 1 and 2 (see the NAMA accompanying key tranche detail below). Less than 30% was land and development. The rest was the sort of loan that is in the non-NAMA portfolio at Anglo – same assets, same type of borrowers, same lender, same lending officers, same lending standards, Why should the losses will be less?

    http://www.nama.ie/Publications/2010/NAMAKeyTranche12Data23Aug2010.pdf

    All of these is now becoming very tangible. What’s the best way of putting it to those who claim the bailout will cost €22-25bn, so that the matter can be constructively dealt with?

  78. “What’s the best way of putting it to those who claim the bailout will cost €22-25bn, so that the matter can be constructively dealt with?”
    You forget that at this stage they are waiting for Steiner…someone in the room needs to suggest ….he aint coming.
    When the goverment issued their “we continue to continue ” statement today the ten year yield rose ten points in a couple minutes. Thats the equivalent of the Soviet artillery pounding on the bunker.

  79. @JS

    ‘All of these is now becoming very tangible. What’s the best way of putting it to those who claim the bailout will cost €22-25bn, so that the matter can be constructively dealt with?’

    An informed Public Protest – with crystal clear demands (rather than requests) for maximum transparency in return for looting already inflicted – not led by and not tolerating leninists swamping these with their flags (SWP). Led by some respected dissenters in the middle class who can hold their nerve – unlike FOT.

    One respected citizen (interview here – http://www.webcitation.org/5fhA1mDPH) started the icelandic protests. Yes – one. Sometimes those you are opposing are not interested in being constructive and have other agendas. To explain this stuff clearly to the population the media – and the ‘balance’ that they achieve by allowing Brian Lenihan to lie unchallenged – need to be routed around. It is as simple as that.

    A list of what the taxpayer should know but does not know would be a good start. And some clear simple demands.

    “At the beginning of the demonstrations there was a lot of unfocused anger around, as people tried to come to grips with what had happened. Our demands really took shape on the third Saturday, as we began to gain a better focus. They were: RÍKISSTJÓRNINA BURT! [away with the government!], STJÓRN SEÐLABANKANS BURT! [away with the Central Bank’s board!], STJÓRN FJÁRMÁLAEFTIRLITSINS BURT! [away with the board of the Financial Supervisory Authority!], and KOSNINGAR EINS FLJÓTT OG AUÐIÐ ER! [elections asap!].”

  80. @ Brian Lucey

    given that you’ve mentioned it a few times on different threads, can you tell me when this alleged 10bps rally in Irish bond yields took place? Bloomberg shows it in a 5bps range all day – until about 3pm when it drops back by about 5-10bps (due to the ISM).

  81. I don’t follow this every day so apologies if covered elsewhere. We asked about subordinated debt. Yes some would transfer ‘to round out capital structure’. They Wouldn’t be drawn on bond buyback but still expected. They’re confident with e25b cos with pre-positioning on Nama loan book as you look is something like e1.6 with another e4.4 or more to go. They seem happy with non-nama back. Tranche 2 was actually 66% for Nama and they’ve sold part of us for a book above impairmenyk

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